When Auto and Insurance Sales Collide on the Showroom Floor

In case you haven’t heard, insurance companies are placing their agencies inside dealerships across the country and within the nucleus of those dealerships an awesome collision of industries is occurring.

This incredible idea is loaded with a ton of quick wins for both the dealership and the agency, but, as with any explosively popular and synergistic idea, it also comes with some challenges. The conundrum for the dealer and agency managers lies in bringing those two industries together while simultaneously orchestrating a seamless integration of people and process from contrasting universes; product (tangible) sales vs. service (intangible) sales.

As new agencies pop up across the nation inside these dealerships, they’re being staffed the best way the dealer knows how: Some with insurance experience only, some with insurance and auto sales experience and some with not much of either.

There are very few people out there in the market place who already have well-rounded experience with both automotive retail and insurance expertise who truly understand the car business side of things. This is very important to note because there is a very clear delineation between working in an insurance agency selling intangibles, and working at a dealership selling see-able, touchable, drive-able, fall-in-love-with-able automobiles. When you mix the two, you’ve got to get it right. Rule No. 1: Never mess up a car deal. Rule No. 2: When in doubt, always refer to rule No. 1.

Most everybody wants a new car, and contrarily most everybody needs insurance. We all hate to have to pay for something we either want or need, but having something useful that you can, touch, interact with and use every day sure helps to take the sting out of that monthly payment. On the other hand, paying for something you need but can’t see or experience, simply put is a tougher sell. How then do we bring the two together to ensure a seamless customer experience all the while enhancing the sales process and adding to our dealership’s total value proposition?

In the marriage between the dealership and the insurance agency, the dealership (locally) is the top dog, already established in both culture and paradigm. Product sales are already established on the sales rep’s level and the sale of any intangibles has generally been hoisted up to the F&I manager. Some stores do pay the salespeople for the backend sale of intangibles like roadside assistance or extended warranties, but, for the most part, the coveted F&I manager has been trained with the skills necessary to close the customers on the purchase of the company’s intangibles.

In the past, there has always been a clear separation between those who sell tangibles and those who sell intangibles. However, it’s easy to integrate the right training protocol and incentive programs, and create a workflow and sales process that complements the existing sales process. When you do, the two worlds can become one cohesive and very powerful overall buying experience.

Being able to offer a customer the opportunity to save money by reducing their insurance cost can create another avenue for the dealership to protect its profits during the negotiation phase of the sales process. Being able to insure a customer at 11 p.m. on a Friday night so they can take delivery can close more sales while the outside insurance agents are all snug in their beds.

Receiving the first “Notice of Loss” when one of your customers is involved in an accident can be a strong umbilical chord to your customer. Showing them you care about them and can engage with them on vital issues long after the sale has happened is one of today’s best marketing plans.

Although the two are very different, they can easily be united into one process. It’s important to recognize, however, that there is a difference between the two. Not knowing this can cause the hiring managers to make some costly errors. Undervaluing any step in the sales process can directly affect the dealership’s and the agency’s profitability.

The best person for the job of agency manager or licensed sales professional might be right under your nose and already working at the dealership. That being said, if you don’t already have that perfect candidate, it’s important that you understand the difference between product sales and service sales and what you need to know to make the best hire possible for these positions.

As with any business, there are varying opinions about how the value of sales staff is viewed. Some business owners feel that salespeople are their greatest liability, while others feel that salespeople are their greatest assets. Within those two schools of thought come varying opinions about what tactics, processes, revenues and priorities this business will place regarding its recruiting efforts for these positions.

Ultimately, it comes down to this. If profitability and sales success comes down to the abilities of the person you hire for the position, keep in mind that the pendulum swings wide both ways. Hiring the wrong person for the job can cost your business an unthinkable amount of revenue, while hiring the right person can make you an extraordinary amount of profit.

When it comes to hiring the right people to work for your organization and the right people are the keys to any company’s success, don’t take shortcuts and don’t undervalue the position. If your agency is built properly it can eventually be worth more than the dealership itself.

These two industries have officially collided and are not likely to revert back to the way they were. If you’re going to participate in this new profit center for your dealership, it’s vital to manage the cohesion of these two industries if you want to gain and maintain a tactical advantage over your competition. 

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